Gov’t better off running than subsidizing MRT — solon

Published by rudy Date posted on March 19, 2009

The public is paying the subsidy for the mismanaged Metro Rail Transit Corp. (MRT) and the government would be better off taking over the operations of the mass transit firm, opposition Sen. Francis “Chiz” Escudero said.

The senator issued the statement in light of frail state of finances of the MRT which he says “continues to drain the national coffers of much-needed funds.”

By his calculations, Escudero said the government subsidy per rider is about P42, computed against the amount of public funds being funneled into the MRT.

“It is like paying for almost three riders more at the current fare rates of the MRT, which on the average is P14 per passenger. The government is paying for riders who are non-existent,” Escudero said.

“The MRT has long been bailed out by the government. While its coaches are always full, its coffers are always empty. The national government subsidy is the one that lubricates its operations. This comes as no surprise because the project was financially engineered to be dependent on government aid,” he points out.

In this case, the senator said, it would be better for the government to take over MRT.

“If we own it, then let’s run it. And let it be a reminder that when it comes to private-public ventures, never again should we end up privatizing profits while debts are nationalized,” Escudero said.

To pay for the arrears of MRT alone, the government had to shell out P2.2 billion in 2007 and 2.45 billion in 2008. Escudero added that this year, it will remit some 1.19 billion for the same purpose.

Escudero added the government subsidized MRT operations and maintenance to the tune of P579 million in 2007 and P618 million in 2008, while a total of P645 million is earmarked for this purpose this year.

“If fares are priced to recover costs, you court a commuter revolt. Mass rail transit is a losing proposition. Rents of real estate in stations or depots are supposed to make up for the losses but these have been ceded to private partners. So government ends up picking the tab,” he said.

“The MRT is economically viable, meaning it is an important cause in the overall scheme of things. But alone, it is not financially viable if only turnstile or farebox income will be considered,” he said.–Daily Tribune

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